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2017 (8) TMI 714 - AT - Income TaxTDS u/s 194J OR 194I - Applicability of Tax Deduction at Source on payments towards internet & communication charges - Held that:- We find that the internet and communication charges are not liable for deduction of any tax at source, as the same are merely in the nature of payments which cannot be characterized as having been made for availing of any special, exclusive or customized services rendered to the user or consumer who may approach the service provider for such service. We find that the issue involved in the present case is squarely covered by the Judgment of the Hon’ble Supreme Court in the case of CIT Vs. Kotak Securities Ltd. (2016 (3) TMI 1026 - SUPREME COURT). We therefore set aside the order of the CIT(A) holding the assessee as being in default u/ss. 201(1)/201(1A) for failing to deduct tax at source on payments made towards internet and communication charges. The Ground of appeal No. 1 raised by the assessee before us is allowed. Liability to deduct tax at source on payments towards lease line charges - Held that:- VSAT and lease line charges paid by the assessee to stock exchange are merely in the nature of reimbursement of the charges paid/payable by the stock exchange to the department of the telecommunication, and thus in the absence of any element of income involved in the said payments, the issue as regards deduction of tax at source on the same does not arise at all. We are of the considered view that in the backdrop of the aforesaid judgment of the Hon’ble Jurisdictional High Court in Income Tax Commissioner, Mumbai City-4 Vs. Angel Capital & Debit Market Ltd. [2014 (5) TMI 584 - BOMBAY HIGH COURT] the order of the CIT(A) treating the assessee as being in default u/s. 201(1)/201(1A) in respect of failure to deduct tax at source as regards the payments made towards lease line charges, cannot be sustained, and is thus set aside Assessee appeal allowed.
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